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Woods, S. A. & de Menezes, L. M. (2010). Family-Friendly Management, Organizational Performance and Social Legitimacy. International Journal of Human Resource Management, 21(10), pp. 1575-1597. doi: 10.1080/09585192.2010.500484This is the accepted version of the paper.
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Family-friendly management, organizational performance and social
legitimacy
Stephen J. Wood
Institute of Work Psychology and Management School at the University of Sheffield, UK. Lilian M. de Menezes
Cass Business School, City University London, UK.
April, 2010 Contact details
Stephen J. Wood, Institute of Work Psychology, University of Sheffield, Mushroom Lane, Sheffield S10 2TN, UK.
Phone: +44 (0)114 222 3230; Fax: +44 (0)114 272 7206; Email: s.j.wood@sheffield.ac.uk Lilian M. de Menezes, Faculty of Management, Cass Business School, 106 Bunhill Row, London EC1Y 8TZ, UK.
Phone: +44 (0)20 7040 8359; Fax: +44 (0)20 7040 8328; Email: l.demenezes@city.ac.uk
Authors’ Note: The UK’s Economic and Social Research Council funded this research
(Grant RES-000-23-1482). We are grateful to Melina Dritsaki for her help in the creation of
the variables that we use in our empirical analysis and to Alex Beauregard, Lotte Bailyn,
Helen Bewley, Uta Bindl, Suzan Lewis, and Stephen Sweet for their comments on a draft of
the paper. The study is based on data from the Workplace Employment Relations Survey
series (WERS), those for 1998 and 2004 (WERS98 and WERS2004). This survey is jointly
sponsored by the Department of Trade and Industry of the United Kingdom (UK), the
Advisory, Conciliation and Arbitration Service, the Economic and Social Research Council,
and the Policy Studies Institute. The National Centre for Social Research was commissioned
to conduct the survey fieldwork on behalf of the sponsors. WERS is deposited and available
from the Data Archive at the University of Essex, UK. Neither the sponsors nor the Data
Archive have any responsibility for the analysis or interpretation of the material contained in
Family-friendly management, organizational performance and social
legitimacy
Abstract
Research on family-friendly practices has concentrated on the predictors of their use,
particularly from the perspective of either institutional theory or the high involvement or
commitment management vogue. This paper first shows how these two perspectives can be
used to generate hypotheses about the link between family-friendly management and
organizational performance. Second, the paper reports research designed to test these, using
data from a national representative sample of workplaces across the British economy, the
Workplace Employment Relations Survey of 2004 (WERS2004). The results support the high
commitment thesis that family-friendly management will strengthen the relationship between
commitment and key economic outcomes, as the relationships between workforce
commitment and productivity or quality is stronger when a workplace has a high level of
family-friendly management, which is consistent with social exchange theory.
Family-friendly management is not, however, related to the human resource outcomes of labour
turnover and absenteeism. Nor does the study find support for the arguments that its use in
conjunction with high involvement management enhances the performance effects of both or
for the hypothesis that family-friendly management has positive effects on the legitimacy of
the organization.
Family-friendly, or work–family, practices have come to the forefront of employment policies
in many countries in the past decade. The initial impetus for this centred on helping women
with the birth and rearing of children, as it was closely tied to the equal opportunity agenda
and primarily aimed at encouraging the participation of mothers in the labour market.
Subsequently, the work–family agenda has typically been extended to paternity leave and
other ways of helping parents become more involved with childcare, and then to the provision
of help for all employees with elder care responsibilities. Societal trends lying behind these
growing concerns include, apart from the demands for equal opportunity, the greater
participation of women in the workforce, the ageing population, the increase in single parent
households and the apparent demand for a better work–life balance. Most recently, a
heightened concern for health issues and the well-being of the population in several major
economies has intensified the interest in a good balance between work and non-work.
While some organizations have responded to these trends by voluntarily introducing
family-friendly practices, academic and other commentators have sought to encourage a more
widespread use of them. They have tended to highlight that family-friendly practices may
have beneficial effects on organizational performance, particularly on reducing labour
turnover amongst women and the retention of human capital, thus professing what has
become known as the business case for work–family programmes (Galinsky and Johnson
1998; Dex and Scheibl 1999, p.23; Drago and Hyatt 2003). Governments have also sought to
encourage organizations by increasingly legislating in this area, gauging that by setting a legal
minimum, their leadership might stimulate organizations to take the issue more seriously and
go beyond this minimum. Of the liberal market economies, the UK government has been at
the forefront of this trend. Legislating in this area and encouraging family-friendly practices
has been a major element of the successive Labour governments’ employment agenda from
its election in 1997 (DTI 1998). In general, employment legislation has been seen as a means
workforce whilst providing a ‘minimum infrastructure of decency and fairness around people
in the workplace’, as heralded by the prime minister in 1998 (DTI 1998, p.3). In the specific
case of family-friendly policies, the aim was to stimulate a culture at work that would reflect a
new relationship between work and family life. Legislation in this area could, it was gauged,
‘enhance’ the understanding of this new culture, and support and reinforce its development
(DTI 1998, pp.3, 31).
The UK Labour government’s approach to legislation has been premised on the
assumption that conflict between work and parenthood and other caring demands, or more
generally employee and employer, can exist, but policies can be developed that may help to
reduce these conflicts and be beneficial for all parties. In the family-friendly area, successive
Labour governments have not gone so far as to reinforce the business case for work–family
balance with claims that family-friendly policies will have strong positive effects on
organizational performance. Nonetheless, there is an expectation that organizations should
benefit if they adopt the new work culture, for example in retaining core staff.
There is little strong theory or empirical analysis to support the business case.
Empirical studies have concentrated on testing the relationship between family-friendly
practices and organizational performance, with little theoretical grounding justifying why one
might be expected. The results of the studies are mixed, and the four studies that reveal a
positive correlation (Vandenberg, Richardson and Eastman 1999; Konrad and Mangel 2000;
Perry-Smith and Blum 2000; Meyer, Mukerjee and Sestero 2001) are based on American
data. One US study (Baughman, Di Nardi and Holtz-Eakin 2003) found little support for the
relationship, as all but one of the family-friendly benefits employers offered was not
associated with labour turnover; the exception was the provision of a child care referral
system. Studies in Australia and Britain concluded there was no relationship (Heiland and
There has, however, been more theoretical development surrounding what types of
organization might adopt family-friendly management, particularly on the predictors of the
extent of its use or of individual family-friendly practices (e.g. Kossek, Dass and Demarr
1994; Goodstein 1995; Ingram and Simons 1995; Osterman 1995; Milliken, Martins and
Morgan 1998; Wood, de Menezes and Lasaosa 2003). A key theory that has been applied to
this question is institutional organization theory, in which the core idea is that organizations
have to react to societal factors in ways that may not be consistent with their ideal strategy or
be cost effective. Part of an organization’s policies thus reflect the need to yield to pressures
to help employees balance their work and family life (Boxall 2006, p.61) in order to achieve
or maintain social legitimacy (DiMaggio and Powell 1983). The emphasis is, then, on the
characteristics of an organization that make maintaining legitimacy particularly salient – such
as its size and visibility in the public domain – as the main predictors of the adoption of
family-friendly management. However, from this perspective, since practices are being
adopted by organizations seeking to appear legitimate in the face of changing social and legal
norms, we would expect family-friendly management to have most effect on the legitimacy
dimension of an organization’s performance than on its economic and human resource
dimensions, what Paauwe (2004, p.70) calls the societal performance of the organization. As
an organization’s main motivation is to respond to environmental pressures, we might not
expect a strong relationship between the use of family-friendly management or practices and
overall organizational performance, though achieving legitimacy should enhance the
organization’s ability to attract staff and may influence workers’ attitudes.
Other perspectives on family-friendly practices may, according to Wood et al. (2003),
be differentiated from institutional theory not simply by their predictors, but by their
conception of the nature of family-friendly management. In other words, perspectives are also
distinguished by what is being predicted and not simply by their predictors. Family-friendly
balance between work and family obligations. This is expressed in management policies, so
there should be some pattern in the provision of a range of family-friendly practices. For
example, we may expect practices concerned with childbirth to coexist with those related to
child rearing.
According to institutional theory, Wood et al. (2003) argue, we would expect this
family-friendly management to have developed in response to changing societal pressures in
the past two decades or so. Management have begun to institutionalize family-friendly
practices in a concerted way and to have an underlying commitment to help employees obtain
a balance between work and family life. If this family-friendly type of management is an
identifiable managerial approach, we would expect practices concerned with childbirth to
coexist not only with those related to child-rearing but also with those concerned with
non-child issues such as elder care. The high involvement perspective (or as Osterman 1995 calls
it, the high commitment approach) that associates family-friendly management with this
modern approach to management takes this argument further, and accordingly views
family-friendly and high involvement management as one integrated employee-centric high
commitment approach.
At the other extreme, under what Wood et al. (2003) call the situational perspective,
family-friendly practices are implemented by management only in response to a particular
labour market problem that could be overcome through helping workers to accommodate their
family life better. In the extreme, a family-friendly management that involves employers
having an underlying commitment to help employees obtain a balance between work and
family obligations would not exist on any significant scale. Managements would simply be
pragmatically using family-friendly practices as and when they are perceived to have some
benefit, for example if there is a high level of labour turnover or absenteeism amongst the
reflects an underlying orientation towards the facilitation of the integration by workers of
their work and non-work activities.
We take Wood et al.’s (2003) argument a step further and suggest that the strong
versions of each perspective also have, in theory, different implications for the link between
family-friendly practices and organizational performance. The purpose of this paper is first to
outline these different perspectives on the association between family-friendly management
and organizational performance. Then secondly to report research that seeks to test the
hypotheses that follow from these perspectives, by using data from WERS2004, a nationally
representative sample of private and public workplaces in Great Britain.
Theories of the family-friendly management–organizational performance relationship
Core perspectives on family-friendly management – the institutional, the high involvement
management, and the situational perspectives – were initially identified from the approaches
to explain the variation in the adoption of family-friendly practices; Wood et al. (2003)
showed they were also differentiated by their conception of the nature of family-friendly
management. Here we explore how each might conceive the relationship between
family-friendly management and dimensions of organizational performance. There may not be a
perfect symmetry between the perspective that most helps in understanding the variability in
family-friendly management and the one that explains best its relationship with organizational
performance. That is, there is no necessary reason why a theory that successfully predicts the
degree of use is best equipped for our present concerns with organizational performance. In
fact the empirical evidence so far suggests that no single perspective (and certainly not in any
extreme form) best predicts adoption of family-friendly management in both Britain and the
USA, the two countries for which we have evidence (Osterman 1995; Wood 1999; Wood et
al. 2003). Also, the value of each perspective may change over time or vary between country;
management had a significantly stronger association with family-friendly management in
2004 than it had in 1998, while the relationship between public sector (an institutional theory
predictor) and family-friendly management was not significant in 2004, although it was in
1998 (de Menezes, Wood and Dritsaki 2009). Such evidence need not prejudice our
theorizing of the family-friendly management–performance relationship, though the factors
indicating the salience of normative pressures that are found to be related to family-friendly
management may influence the selection of any institutional factors that could moderate the
relationship.
The institutional perspective
Institutional theory emphasizes the importance of legitimacy. Applied to family-friendly
practices, it assumes that changing environmental factors act as pressures on organizations to
react and introduce these practices, regardless of whether they fit their strategies or yield
profits. Part of an organization’s policies thus reflect the need to comply with such pressures
(Paauwe 2004; Boxall 2006, p.61), as they need to achieve or maintain social legitimacy
(DiMaggio and Powell 1983). Legitimacy is about being seen by stakeholders, including
existing and potential employees, as conforming both to laws (in spirit and letter) and to
strongly held or developing social norms. As such it involves the relationship between the
organization and society (Paauwe 2004, p.4), meaning that the logic of appropriateness guides
the behaviour of actors within an organization, and not simply economic rationality.
Applied to family-friendly practices, institutional theory predicts that they are adopted
when social legitimacy is critical to the organization. The implication is that practices are
introduced without management having any strong belief, or evidence, that they will greatly
impact on economic performance. Indeed, the lack of research evidence on family-friendly
those managements that had adopted childcare assistance. Following this argument, we would
anticipate an association between family-friendly management and an organization’s
achievement of legitimacy. We thus test:
Hypothesis 1: Family-friendly management is associated with the social legitimacy of an organization.
Perry-Smith and Blum (2000) also hypothesized that the effects of family-friendly
management on performance are greater for large organizations than they are for small ones.
They argue this partly on the basis that large organizations experience more institutional
pressures. This may explain the adoption of family-friendly management in an integrated and
coherent way, but it does not necessarily mean that large organizations achieve more reward
from its use. However, it seems plausible that the marginal impact of size on social legitimacy
is amplified for those organizations that place more importance on maintaining social
legitimacy. Conversely, a small organization out of the limelight of the media and other
pressures is unlikely to gain much legitimacy from family-friendly management. Size as a
measure of the salience of institutional pressures on organizations may, then, moderate the
family-friendly management–performance relationship. By the same argument, we expect the
impact of family-friendly management on social legitimacy to be greater in public sector
organizations for which the societal pressures are more intense. We thus hypothesize and test:
Hypothesis 2: The association between family-friendly management and social legitimacy is moderated by (a) the size of the organization and (b) the public or private status of the organization.
Legitimacy may not, however, be at the expense of economic performance or incur
such high costs that profits are eroded. It may be that some performance outcomes are directly
affected by legitimacy. For example, organizations with high legitimacy and prestige may
attract good staff and customers precisely because of this, and thus may have superior
between family-friendly management and economic outcomes. We thus test the following
hypothesis:
Hypothesis 3: The association between family-friendly management and economic or human resource outcomes is partially mediated by social legitimacy.
In a similar vein, it may be argued that an organization’s social legitimacy is symbolic
to employees, and this will have beneficial performance effects. Perry-Smith and Blum (2000,
p.1108) argue that ‘a range of work–family policies is likely to both symbolize that the
organization cares about employee well-being and to represent a value system in which
employees are likely to respond favorably … by contributing effort … and embracing its
goals’. The effect of family-friendly management is consequently seen to work through its
effect on employees’ perceptions of supportive management. We therefore hypothesize:
Hypothesis 4: The association between family-friendly management and economic or human resource outcomes is partially mediated by perceptions of supportive management.
The organizational adaptation variant of institutional theory allows for differences in
the significance of pressures on workers as well as management (Goodstein 1995). Given that
family-friendly policies are still generally associated with balancing motherhood and work,
since women continue to shoulder more of the burden of caring for children, elderly or
disabled relatives (Sarkisian and Gerstel 2004), we might expect the impact of family-friendly
management on supportive management, and in turn on economic performance, to be greater
in organizations with a high proportion of female workers. Support for this hypothesis was the
main finding of Konrad and Mangel’s (2000) study of US private and public sector
organizations. Thus we test:
Variants of the institutional perspective also allow for managements’ values and
employees’ perceptions of managerial action. We therefore may expect family-friendly
management to have more impact on supportive management and this in turn on performance,
where the employer values their employees having a healthy work–non-work balance and
sees itself as having a role in this. We hypothesize:
Hypothesis 6: The associations between family-friendly management and supportive management, and between supportive management and economic or human resource outcomes, are moderated by whether management perceives that it has a responsibility in helping employees have a balance between work and family.
The high involvement and high commitment management perspective
A perspective on family-friendly management has emerged in the wake of the more general
concern for high involvement management (Lawler, Mohrman and Ledford 1995), which is
also associated with the high commitment management (Walton 1985; Wood and Albanese
1995) or the high performance system (Huselid 1995; Appelbaum, Berg and Kalleberg 2000).
High involvement management involves an underlying orientation on the part of
management towards involving and developing all employees through the use of practices
including job enrichment, teamworking, functional flexibility, extensive training and
development, and idea-capturing methods like quality circles (Wood and Bryson 2009). The
adoption of such practices and the participative philosophy underlying them would demand,
and by implication successfully engender, a greater level of employee involvement and
proactivity (Wood and de Menezes 2008). The high involvement model is conceived as an
alternative to a control model based on job simplification, tightly defined divisions of labour,
rigid allocations of individuals to narrowly defined tasks and minimal employee participation
in higher-level decisions (Walton 1985). Whilst there remains doubts about its precise impact
and Smeaton (2003, p.176) note, ‘reasonable to assume that many employers adopt [it]... in
order to improve performance’. On motivational grounds, then, it might have the right to be
called the high performance approach.
In the high involvement approach, family-friendly management is either an integral
element or is strongly associated with it (Osterman 1995). If it is the former, we would expect
a direct link between this holistic high involvement management and organizational
performance. Evidence from analysis of the data on family-friendly practices and high
involvement practices in WERS2004, however, shows that there is an association between
family-friendly management and high involvement management (correlation = 0.43); but they
they do not load into a single factor (de Menezes et al. 2009) and as such are separate forms
of management, a result echoing that in Wood et al.’s (2003) study based on WERS98. Given
this, family-friendly management may be a mediator of the effect of high involvement
management on performance. Managements following high involvement management ‘seek
to elicit commitment from their workers ... by instituting family-friendly policies’ (Berg,
Kalleberg and Appelbaum 2003, p.172) and, assuming it has the desired effect, the increased
commitment in turn increases performance. We thus test:
Hypothesis 7: Family-friendly management partially mediates the association between high involvement management and economic or human resource outcomes.
Alternatively, family-friendly management may not necessarily be driven by high
involvement management, but when it is adopted in conjunction with high involvement
management it acts as a support for it, thus strengthening the link between high involvement
management and economic or human resource outcomes. That is, it may enhance
organizational commitment and participation in the high involvement regime. In contrast,
some have argued that high involvement management moderates the family-friendly
which arises, it is argued, from high involvement management’s tendency to increase the
demands on workers (White et al. 2003, pp.178–179). We therefore consider:
Hypothesis 8: The interaction between high involvement management and family-friendly management is associated with economic or human resource outcomes.
It may, however, be that the effects of family-friendly management on performance
come from it operating as a high commitment practice (Berg et al. 2003), regardless of
whether it co-exists with high involvement management. Consequently, as a direct means of
engendering commitment to the organization, family-friendly management increases
productivity or quality and labour stability, and reduces absenteeism. It is this kind of
argument that Vandenberg et al. (1999, p.326) put forward as a possible explanation for their
positive finding that the presence of family-friendly practices was associated with the return
on equity in their sample of US firms, as they speculate, ‘Perhaps individuals feel a greater
sense of obligation to … [their] organization and, as such, put forth much greater efforts
which collectively results in greater firm profitability’. We thus hypothesize that employee
commitment mediates the relationship between family-friendly and performance:
Hypothesis 9: The degree of commitment of the workforce partially mediates the association between family-friendly management, high involvement management and economic or human resource outcomes.
An alternative high commitment thesis might be that family-friendly management
reinforces the effect that a committed workforce has on organizational outcomes; the level of
commitment in this case is assumed to be largely independent of family-friendly
management. Thus, family-friendly management moderates rather than mediates a
relationship between organizational commitment and performance. This would be consistent
with social exchange theory (Blau 1964), as family-friendly management might be viewed by
the employee as signalling that the employer is reciprocating their commitment. In
management to enhance performance. In contrast, where the commitment is low we might
expect it to have no effect, as family-friendly practices might be taken for granted as
employee rights, or viewed as largely irrelevant. Thus, employee commitment and
family-friendly management have a mutually reinforcing impact on organizational performance. We
test:
Hypothesis 10: The interaction between the degree of commitment of the workforce and family-friendly management is associated with economic or human resource outcomes.
The situational perspective
In the situational perspective of Wood et al. (2003, p.228) and the practical response
perspective of Osterman (1995), managements are assumed to react to local circumstances
rather than to societal normative pressures. Even though in this study we observe a pattern in
the availability of family-friendly practices that is not consistent with the ad hoc, idiosyncratic
adoption predicted by the situational perspective, it could still be that the link with
performance is associated with highly specific local factors.
In line with economic theory, on the one hand, any strong benefit of family-friendly
management may be confined to the first-mover advantage that the early adopters might gain,
as shown by Heiland and MacPherson (2005), regardless of whether this is largely a symbolic
effect via the employees’ perception of the organization or due to the practical solutions for
employees’ work-life problems. In the equilibrium, we would not expect strong performance
effects, either on productivity or profits, since all firms will either provide these practices or
adjust their monetary compensation so that employees can buy the equivalent of what the
employer would otherwise provide.
On the other hand, if the labour market does not sort individuals correctly,
will reap economic and human resource gains relative to organizations with an equally high
proportion of such workers but with no such family-friendly practices. Accordingly, we
would expect characteristics of the workforce or the labour market to be dominant in
explaining both the use of family-friendly management and variability in its impact on
economic and human resource outcomes (as in Hypothesis 5). Moreover, we would expect the
link between family-friendly management and economic or human resource outcomes to be
moderated by even more specific characteristics than simply the proportion of females in the
workforce. WERS provides limited information on such characteristics and thus we frame our
hypothesis in terms of care responsibilities of a child at school age. We can assume that men
also have childcare pressures and thus test:
Hypothesis 11: The interaction between family-friendly management and the proportion of employees with pre-school aged children will be associated with economic or human resource outcomes.
This assumes that the moderating effect of the proportion of employees with children
of pre-school age on the relationship between family-friendly management and economic or
human resource outcomes will be independent of the proportion of women in the workforce.
This may not be the case, so we therefore also test the following:
Hypothesis 12: The three-way interaction between family-friendly management, proportion of females in the workforce and the proportion of females with pre-school aged children will be associated with economic or human resource outcomes.
We now report a study designed to test the set of hypotheses that we have identified.
Available studies, which have produced the mixed results, have concentrated on the
association between family-friendly practices and economic outcomes.
Method
In this study we use data from the UK’s WERS2004. It is the fifth in an ongoing series of
nationally representative surveys of British workplaces. It is the second to include
family-friendly practices and the first to contain workplaces with less than 10 employees. We use
data from both the management survey of workplace practices and the employee survey.
The management survey was based on a face-to-face interview with the senior person
at the workplace with day-to-day responsibility for industrial relations, employee relations or
personnel matters. In some cases this was a personnel specialist. In others, it was a general
manager or a person with a different functional specialty, such as finance. Interviews were
conducted with managers in a total of 2,295 workplaces from an in-scope sample of 3,587
addresses, representing a response rate of 64 per cent. The sample covers the private and
public sector and all industries, with the exception of establishments engaged in primary
industries and private households with domestic staff (7 per cent of all workplaces).
Establishments with fewer than five employees (60 per cent of all workplaces) are also
excluded. The sample was taken from the Inter Departmental Business Register, maintained
by the Office of National Statistics.
The employee survey led to a sample of 22,451 employees, which represents a
response rate of 61 per cent. The data were collected via an eight-page, self-completion
questionnaire distributed within workplaces where WERS surveyors had conducted the
management interview. The aim was to get up to 25 employees in each workplace, selected
on a random basis, to complete the questionnaire. Employee questionnaires were distributed
in 86 per cent of the workplaces where the WERS surveyors had conducted the management
interview. A further 12 per cent of workplaces did not return any questionnaires, and in those
with 10 or more employees these were treated for the purposes of calculating the 61 per cent
response rate as the same as those who had initially declined to distribute questionnaires. The
most frequent (in 100 workplaces) being 16 employees. The number of employees in no cases
exceeded the 25 employees requested by the surveyors.
Measures
Dependent variables
Social legitimacy is measured by a binary variable that indicates whether the workplace is
accredited as an Investor in People, which is a national accreditation that organizations in the
UK can apply for that looks at, among other things, their training and development (see
www.investorsinpeople.co.uk). As Boxall and Purcell (2003, p.18) note, it is widely taken as
providing legitimacy and is sought by managements as a sign that their organization is a good
employer committed to employee development. It involves a well-established process of
validation and accreditation that includes site visits and confidential meetings with a selected
sample of employees from diverse backgrounds and within different levels in the
organization.
Economic performance is measured by three outcomes: financial performance, labour
productivity and quality, which are based on the assessment made by the managerial
respondent on five-point scales.
Human resources outcomes included are: labour turnover, which is measured as the
proportion of employees who resigned from the establishment in the 12 months prior to the
interview; and absenteeism, which is measured as the percentage of work days lost through
employee sickness or absence in the workplace over the last 12 months. Given that these two
measures have distributions that are skewed with long tails, a logarithmic transformation is
applied.
Independent variables
Family-friendly management is measured by the latent score from a latent trait model of nine
contracts, job-sharing, workplace nursery, childcare subsidies, financial help to care for
elderly relatives, and elder care leave. The measures of practices are binary indicators of
whether non-managerial employees are entitled to the practice. Thus, the latent trait model is
used as it models a continuous latent variable based on binary manifest indicators.
We adopt the formulation, goodness-of-fit and reliability statistics as prescribed by
Bartholomew and Knott (1999, pp.77–101). We compare the observed (O) and expected (E)
response patterns for pairs and triplets of items. This is done by constructing the statistic
[(O-E)2/E], where O and E are respectively the observed and expected frequencies for each
response pattern. The closer it is to zero, the better the fit of the model. When a significant
number of these statistics are large, there are residual associations between items that are not
due to the common factor. Furthermore, if the same item (practice) is found in problematic
pairs and triplets of items, it is likely to be the cause of any bad fit and thus it is excluded
from the model and may be treated separately in further analysis. We assess the quality of fit
of the latent trait models by examining the Chi-square statistic for observed response patterns
or the percentage of G2 (the log-likelihood ratio statistic for complete independence). The
closer the percentage of G2 is to 100 per cent, the better the fit.
The percentage of the log-likelihood ratio statistic that is explained by the model is
equal to 64.4 per cent, the fits to the two- and three-way contingency tables were reasonable
(residuals were less than 4) and the reliability coefficient was equal to 0.73. As WERS2004
includes elder care provisions, the measure is not concentrated solely on child-centric
family-friendly management, like measures based on WERS98 inevitably were. Flexitime is discrete
from this type of management. Paternity leave and paid parental leave, two practices now
subject to legislation, are highly correlated with maternity leave, but together they do not form
a separate dimension and thus they are excluded from the measure. The model parameters and
- Insert Table 1 -
High involvement management approach is measured by two dimensions. First, a measure
based on a latent trait model fitted to a set of indicators of the availability of nine flexible
work organization and high involvement skills acquisition practices, as used by Wood and de
Menezes (2008): quality circles, functional flexibility, teamworking, suggestion scheme,
induction, interpersonal skills training, team briefing, information disclosure, and appraisal.
The percentage of the log-likelihood ratio statistic that is explained by this model is equal to
63 per cent, two residuals to the two- and three-way contingency tables were less than 5 and
the score’s reliability coefficient is equal to 0.68.
We tested whether the high involvement practices in WERS2004 together with the
family-friendly practices in our measure formed a unique dimension. A one-factor latent trait
model fitted badly: the percentage of the log-likelihood statistic that is explained by the model
was 40 per cent and the Chi-square statistic was huge. Hence, there is no evidence that the
two sets of practices form a whole, though they are positively associated (r = 0.43).
Second, a score on empowered or enriched work, based on a latent trait model of three
dimensions of the jobs of the largest occupation in the workplace: task variety, method
control, and timing control. The percentage of the log-likelihood ratio statistic that is
explained by this model is equal to 73 per cent, residuals to the two- and three-way
contingency tables are all less than 1 and the score’s reliability coefficient is equal to 0.82.
Mediator or moderator variables
Workforce commitment is measured by the average level of affective commitment in the
workplace; organizational commitment is measured by a scale based on a three-item question
from the employee survey – to what extent do you disagree or agree with these statements: ‘I
share many of the values of my organization’, ‘I feel loyal to my organization’, and ‘I am
items developed by Lincoln and Kalleberg (1990). Aggregating values of such measures to
the workplace should only be done if there is sufficient agreement in the individual-level
scores within the majority of workplaces. By using the index of agreement developed by
James, Demaree and Wolf (1984), we ascertained that it is statistically meaningful to
aggregate the individual-level organizational commitment scores to produce the workplace
average. The index of agreement was at least 0.7 (which is generally taken as an acceptable
cut-off point) in 80 per cent of workplaces.
Employment level of the workplace is our measure of the size of the organization, calculated
as the logarithm of the total number of full- and part-time employees.
Public workplace is a binary variable that equals one if the workplace is in the public sector
and zero if it is in the private or voluntary sector.
Supportive management is measured by the average of a six-item scale (Cronbach’s α = 0.93)
based on a question in the employee survey that asked about the extent to which the managers
at the workplaces had the following characteristics: ‘can be relied upon to keep to their
promises’, ‘are sincere in attempting to understand employees’ views’, ‘deal with employees
honestly’, ‘understand about employees having to meet responsibilities outside work’,
‘encourage people to develop their skills’, and ‘treat employees fairly’.
Management’s concern for employees’ balance between work and family life is measured by
the management respondent’s level of agreement with this statement: ‘It is up to individual
employees to balance their work and family responsibilities’. Where respondents did not
agree, the variable was coded one.
The proportion of the females in the workforce is the number of females as a proportion of the
total workforce, calculated from data from the employee survey.
The proportion of parents with pre-school children is the proportion of total workforce that
The control variables included as independent variables in the regression models are: the
workplace is part of a larger organization, the age of the workplace (years that current owner
has been operating at the present address), proportion of operational and routine workers,
proportion of young workers (measured by employees aged 21 or below), proportion of
part-time workers and proportion of new recruits (measured by workers that commenced work in
the past 12 months), union density, 11 industry group binary variables (baseline is the
construction sector, which has significantly less family-friendly management (according to
results from an ANOVA).
Data analysis procedures
We test our hypotheses on the link with performance by regression analyses. All the models
are weighted to account for the sample design, and the type of model varies according to the
type of dependent variable. When the dependent variable is social legitimacy, the models are
weighted binary logistic regressions; when it is an economic outcome (an ordinal measure
based on management’s rating), it is a weighted ordered logit model; and finally for the
human resource outcomes that are continuous variables, we use weighted least squares.
Moderators that are continuous variables are standardized.
Missing values are assumed to be at random, for we have no grounds to believe that
they are informative. Consequently, in regression analyses sample sizes can fall significantly
due to the many independent variables. We re-ran the models excluding those controls that
were insignificant, and our results were confirmed in a larger sample.
Results
The institutional perspective
This hypothesis is not supported by the analysis. The association between
family-friendly management and our measure of social legitimacy is not high (r = 0.3). When we
control for other factors, by running a binary logistic regression where social legitimacy is the
dependent variable and the independent variables are the family-friendly management
measure and the controls, the association is not significant (p-value = 0.13, see Table 2).
Social legitimacy is positively associated with union representation and being part of a larger
organization (p-values = 0.00), which are known to predict family-friendly management (e.g.
Wood et al. 2003; Mumford and Budd 2006). In short, we have no support for a direct
association between family-friendly management and social legitimacy, and consequently
find no support for Hypothesis 1.
- Insert Table 2 -
Hypothesis 2: The association between family-friendly management and social legitimacy is moderated by (a) the size of the organization and (b) the public or private status of the organization.
Just as there is no association between family-friendly management and social
legitimacy, when we control for other factors the inclusion of an interaction between
family-friendly management and the standardized size of the organization to this regression model is
also not significant (p-value = 0.34). Furthermore, the size of the organization does not
moderate the association between family-friendly management and other performance
measures, for the interaction is not significant in any of the models of performance (p-values
> 0.10). Similar negative results were found when we assess if being a public sector
organization moderates the relationship between family-friendly management and legitimacy
(as well other performance measures).
No mediation is possible since family-friendly management is not associated with
social legitimacy. Nor is family-friendly management associated with any measures of
economic or human resource outcomes (see row 3, Table 3). Social legitimacy is also not
associated with performance, with one exception – a negative association with labour
turnover (p-value = 0.05). In consequence, we have no support for Hypothesis 3.
- Insert Table 3 -
Hypothesis 4: The association between family-friendly management and economic or human resource outcomes is partially mediated by perceptions of supportive management.
Given that there is no association between family-friendly management and
performance, we have no support for Hypothesis 4. In addition, family-friendly management
is not associated with supportive management (p-value = 0.16). Supportive management is,
nonetheless, positively associated with quality (p-value = 0.01) and negatively associated with
absenteeism (p-value = 0.01).
Hypothesis 5: The associations between family-friendly management and supportive management, and between supportive management and economic or human resource outcomes, are moderated by the proportion of females in the workforce.
The interaction of family-friendly management and the proportion of females in the
workforce is not associated with supportive management, nor is that between supportive
management (or family-friendly management), the proportion of females in the workforce
and any performance measures (p-values > 0.15). Therefore, Hypothesis 5 is also not
supported by the data.
There is no support for Hypothesis 6; the interactions of either management’s concern
for family–work life balance with family-friendly management, or management’s concern for
family–work life balance with supportive management are not positively associated with
economic or human resource outcomes (0.15 < p-values < 0.72). The combination of
family-friendly management and management’s concerns for family–work life balance is also not
significantly related to these outcomes, with one exception where the management’s approach
is negatively associated with quality (p-value = 0.04).
The high involvement management perspective
Hypothesis 7: Family-friendly management partially mediates the association between high involvement management and economic or human resource outcomes.
Through testing Hypothesis 2 (Table 3) we know that there is no association between
family-friendly management and economic or human resource outcomes. Nonetheless, high
involvement management is positively associated with labour productivity (p-value = 0.00)
and financial performance (p-value = 0.04), and work enrichment is associated with financial
performance (p-value = 0.01). Neither relationship alters when family-friendly management is
added to the model. Thus, though there are associations between high involvement
management and some measures of economic or human resource outcomes, these are not
mediated by family-friendly management.
Hypothesis 8: The interaction between high involvement management and family-friendly management is associated with economic or human resource outcomes.
The interaction between family-friendly management and high involvement
management is not significantly related to performance (minimum p-value = 0.15). Thus, we
have no support for both hypotheses derived from the high involvement perspective of the
Hypothesis 9: The degree of commitment of the workforce partially mediates the association between family-friendly management, high involvement management and economic or human resource outcomes.
As there is no relationship between family-friendly management and performance this
hypothesis is not supported. Nonetheless, family-friendly management is related to the degree
of workforce commitment (p-value = 0.04) and the workforce’s commitment is positively
related to productivity (p-value = 0.05) and quality (p-value = 0.00), but not financial
performance (p-value = 0.25). It is negatively related to absence (p-value = -0.02), but not
labour turnover (p-value = 0.50).
Hypothesis 10: The interaction between the degree of commitment of the workforce and family-friendly management is associated with economic or human resource outcomes.
This interaction is associated with productivity and quality (see Table 4), and the
workforce’s commitment remains significantly related to measures both of economic and
human resource outcomes when the interaction is included in the model. This supports
Hypothesis 10 and the notion that family-friendly management symbolizes that management
reciprocates to employees their commitment and this enhances the impact their commitment
has on economic and human resource outcomes. However, the interaction between the degree
of commitment of the workforce and family-friendly management is not associated with
financial performance, absence or turnover.
- Insert Table 4 -
The situational perspective
Although the proportion of employees with pre-school aged children is positively
associated with absenteeism (p-value = 0.04), the two-way interaction between it and
family-friendly management is not related to economic or human resource outcomes (p-values > 0.3).
Hypothesis 12: The three-way interaction between family-friendly management, proportion of employees in the workforce with pre-school aged children and the proportion of females in the workforce will be associated with economic or human resource outcomes.
The three-way interaction involving family-friendly management, proportion of
females in the workforce and the proportion of employees with pre-school aged children is
not significant (p-values > 0.4). Thus we have no support for Hypothesis 12. We therefore
have no evidence in favour of the situational perspective.
Discussion
This paper has focused on perspectives of family-friendly management that may predict its
relationship with economic or human resource outcomes and as such provide some basis for a
business case for its adoption. It is the first study that has tested the variety of predictions that
these perspectives generate.
Our results rejected the non-economic arguments associated with the institutional
thesis that family-friendly management will have positive effects on the legitimacy of the
organization. They also show no independent relationship between legitimacy and economic
or human resource outcomes. However, family-friendly management is related to two key
economic outcomes, productivity and quality, but these relationships are dependent on the
level of organizational commitment of the workforce: within the workplaces with high levels
of commitment, the greater the level of family-friendly management, the higher the
productivity and quality. This supports the notion that effects of family-friendly management
The finding that family-friendly management is consistent with the central assumption
of perceived organizational support theory, a specific application of social exchange theory,
that support strengthens commitment and performance by a reciprocation process
(Eisenberger, Armeli, Rexwinkel, Lynch and Rhoades 2001). Family-friendly management
thus acts as a high commitment practice in the sense that it may generate commitment. It
enhances the impact of the commitment on performance, but it is not a main effect on
performance that is either moderated or mediated by commitment.
Given the institutional theory’s assumption that the salience of institutional pressures
is higher in the public sector and large organizations, we tested to see if the effect of the
interaction between family-friendly management and committed workforce was stronger in
public sector workplaces or as the workplace size increased. Neither was the case. We also
tested if these interactions were associated with legitimacy and they were not.
The study may been seen as showing that family-friendly management does, at least in
certain circumstances, have economic effects, contrary to Heiland and MacPherson’s (2005)
argument. The stronger association of family-friendly management with productivity and
quality, as compared with absenteeism and turnover – the former being related to
commitment, the latter not – reinforces the significance of the longstanding distinction
between workers’ motivation to produce and their motivation to participate in organizations.
We should not in fact necessarily expect that what predicts effort and performance would also
predict withdrawal behaviour. In emphasising the symbolic importance of family-friendly
management, we are not ruling out that it has helped particular individuals to handle personal
or family problems, or to balance their work and family or more generally non-work lives. Or
even that such effects are more pronounced in highly committed workforces, though we did
not find that the three-way interaction between family-friendly management, committed
productivity or quality. Moreover, the evidence that family-friendly practices reduce work–
family conflict is not yet strong (Thomas and Ganster 1995; Lapierre and Allen 2006).
Another significant outcome of the study is that it suggests that family-friendly
management, at least currently, is independent of a general supportive management. The
finding that supportive management is positively related to quality and negatively associated
with absenteeism reinforces the argument that line management’s behaviour may be as, if not
more, important than formal policies and practices for some outcomes (Thomas and Ganster
1995; Behson 2005; Lapierre and Allen 2006; Premeaux, Adkins and Mossholder 2007). Our
measure of supportive management includes an item specifically related to outside work
responsibilities. Given its correlation with the other practices, we were not able to test
whether this specific element of supportive management had a greater effect than a more
general supportive management. Its significance does, though, raise the possibility that
informal family-friendly practices, operating through line management or co-worker
relationships, may have an impact on performance as well as family–work conflict. Moreover,
the existence of formalized family-friendly management may boost the effect of these
informal practices or facilitate the adoption of informal practices, which our test for the
interaction effect between supportive management and family-friendly management and
performance may not have been refined enough to capture. An additional test to judge
whether our core result, that family-friendly management strengthened the link between
commitment and productivity or quality where managements were supportive, however,
found this not to be the case.
Our focus has been on family-friendly management conceived within the terms of
current policy parameters. It can help reduce what Sturm (2001) calls first generation
discrimination, but may leave largely untouched the more subtle and complex forms of biases
be carried out, the nature of ideal workers or the inevitability of rather demanding and
unquestioned working hours’ (Lewis, Gambles and Rapoport 2007, pp.366–367). More
radical approaches to work–personal life integration and gender equality would address
directly the underlying structure of how jobs are designed and work is coordinated, how
organizational rewards are determined (Rapoport, Bailyn, Fletcher and Pruitt 2002;
Thompson 2005; Lewis et al. 2007), and above all else be based on the belief that ‘personal
time is a legitimate employee need’ (Bailyn 1993, p.87). Such an approach would require
organizations to behave much more transparently and to hold more open discussions of the
issues of gender, work and non-work than is currently the case. Bailyn’s (2009) action
research case studies show how organizations that have taken this radical, second generation
approach have achieved specific performance improvements such as reduced absenteeism and
improved quality. Although such organizations may be scarce, it is not, in our judgement,
premature to develop measures of the culture of organizations that capture particular
dimensions, such as their perspectives on working time and concepts of the ideal worker.
These could build on existing measures of work–family culture (Thompson, Beauvais and
Lyness 1999) but would attempt to go far beyond traditional work–family concerns by
including measures, for example, of the importance of the time people spend at work or are
accessible, the relative weight in evaluation accorded to inputs versus outputs, and the model
attributes of the top performer.
This study’s strength is that it considers a wider range of hypotheses than previous
studies, using a broad-based measure of family-friendly management and a range of
performance measures. Our findings are based on a large sample of organizations across the
British economy, which when weighted is representative of the UK.
The main weakness of the study is that we only have one measure of legitimacy, the
Investors in People award; nonetheless, this is the best measure that was available in this data
the development of multi-item measures to capture social legitimacy. Our test of the
situational approach was based on one group of workers, those workers with pre-school
children. It may yet be that the effect of family-friendly management on organizational
performance is related to its utility for even more highly specific groups than we have
captured.
As the data in WERS is limited to the availability of family-friendly practices,
information on their use by particular employees is unavailable. It may be that a measure of
use of practices in organizations is related to some or all economic and human resource
outcomes measures. Yet a study (Lambert 2000) that incorporated measures of use suggests
this may not necessarily be the case. Eaton (2003), however, found that perceived usability of
practices (i.e. whether the employee felt free to use the practices) was related to individual
performance, measured on a self-rated scale.
WERS2004‘s employee survey includes questions on the individual’s perception of
the availability of some practices. This tells us whether employees think their organization
has specific family-friendly practices, but not about their use of these. take up. . As such
respondents may have included informal arrangements in their assessments as well as formal
practices. We recommend that the employee survey is the best place for questions on the use
and relevance of practices, and that these should be included in the next WERS survey.
We investigated whether the awareness that a practice was available in the workplace
was associated with performance by creating binary measures of awareness for each practice
that are equal to 1 when the proportion of those who are aware is above average. A reliable
index of the total awareness of practices could not be constructed. However, awareness is in
most cases not associated with economic nor human resource outcomes, in models where the
awareness of a family-friendly practice is the independent variable and the controls are those
(p-employees’ perception of the availability of family-friendly practices is not associated with
performance. Interactions involving these practices and the family-friendly management
measure are also unrelated to performance.
Conclusions
This paper has first outlined how theories of family-friendly management might predict the
relationship between it and organizational performance, and then used data from a nationally
representative sample of British workplaces to test them. Family-friendly management has
been shown to be jointly related with commitment to productivity and quality, and to
moderate the relationship between the level of organizational commitment of the workforce
and key economic outcomes. Thus, in workplaces with high levels of commitment, the greater
the level of family-friendly management, the higher the productivity and quality. While
family-friendly management is not affecting performance through inducing commitment, it
reinforces the effect that commitment has on performance by signalling to employees that
management reciprocates their commitment to the organization. This is consistent with social
exchange theory.
There is no support for institutional theory, with its emphasis on family-friendly
management as a source of legitimacy, or the high involvement management perspective,
according to which any effect would be due to the association between family-friendly and
high involvement managements. Nor does it appear that family-friendly management’s
performance effects reflect situations where family-friendly practices are most needed.
For mainstream policy, our study implies support for the UK Labour government’s
claim that family-friendly management may be of benefit to employers – particularly
affecting quality and productivity, two vital outcomes. Moreover, it is not in conflict with any
organizational objectives, as it does not have negative effects on any of the outcomes we
management may even reduce conflict between employers and employees. Such ideas would
require another study, which, like any further study in this area, would have to include the
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